Senator Jeff Kruse: How we got into this tax mess

In the January special election the voters will be asked to support or reject two tax measures (Measure 66 and Measure 67). Over the next couple of months you will hear a lot from both sides about the dire consequences of either a yes or a no vote on these measures. Before I get into the merits of the measures I think it is important to understand how we reached this point.

In the 2007 legislative session government grew by over 20%. While the revenue forecast did line up with that rate of growth, we warned leadership at the time it was not sustainable and we should back off. Our advice was ignored. We ended up having to make reductions in budgets during the last quarter of the biennium because, although revenue had increased, it had not increased at the rate projected.

As we entered the 2009 legislative session we had a Governor’s budget that called for an all funds increase of over 4 billion dollars. This was quite simply taking the flawed revenue projection from the last biennium and moving it forward. We knew, as did the Governor, that the money was not there. At the very beginning of the session legislative leadership was calling for at least one billion dollars in new revenue and this was before there was any consideration of any streamlining or efficiency measures. As it turns out there were no real efforts made to reduce the cost of government or make it more accountable; all efforts went to finding new ways and reasons for expanding government. At the end of the day the all funds budget passed in 2009 was a 9% increase over the previous budget.

Legislative leadership exceeded their own expectations by passing bills increasing taxes, fees, permits, etc. at a level that will take an additional 1.5 billion dollars from the private sector. When you are told we had to cut budgets it is a lie and the people telling you that know it. If you were expecting a $2 an hour raise and only got a $1 an hour raise would you consider it a cut? In the world of politics it is spun just that way.

We are in a recession, which everyone knows; it is just that some people in government react to this situation in a different way than I would. In my opinion job one for the Legislature should be to help restore jobs in the private sector, but the majority party has taken an approach that puts protecting government as the highest priority. To illustrate this point, let’s take a look at the October 2009 job numbers from the Oregon Employment Department. In October the private sector lost 7,800 jobs while the public sector gained 16,300. Those who will tell you the creation of a government job stimulates the economy (and there are several in the Legislature) are demonstrating a total lack of understanding of economic principles. Sure it is great for the person who gets the job, but we are going to run out of “other people’s money”.

Now let’s go back to the actions of the Legislative Assembly. After increasing virtually every fee and license charges and passing four significant tax increases, leadership decided to try and fix the game. They brought forward a bill to set a date for the election, which was appropriate (although it would have been more appropriate if we had referred the taxes to the voters ourselves). However, they were not satisfied with just setting a date. In the original version of the bill there was a provision which would have essentially meant to vote no meant yes and yes meant no. We were able to stop this particular maneuver. We were not successful in stopping the provision that set up a legislative committee to write the ballot titles and explanatory statements. In all other cases of initiatives a committee of proponents and opponents of the measure is created to write the ballot title and explanatory statement and it is overseen by the Secretary of State. When you combine this blatant move by the majority party to control this process with the Governor’s delay in signing the bills to limit the time to gather signatures, this can be seen as nothing short of an attack on the initiative process itself.

We know these tax increases are not necessary and there are other ways to balance the budget. In a future newsletter I hope to go into more detail, as we are currently compiling the data. Unfortunately this work is going slower than it should be as we are being blocked from receiving the information we need. I think it is very telling that we might have to file a motion under the Freedom of Information Act to receive data that should be readily available to us as a matter of doing our business.

I will, however, give you one little tidbit now to demonstrate the disingenuousness of the information coming out of government. The Governor announced state employees would be taking up to ten unpaid furlough days as a cost saving measure. On the front end I thought this was absurd simply from the perspective we would have ten additional days the public would not be getting services. But here is the rest of the story according to the number received from the Department of Administrative Services. In 2008 the average compensation (salary and benefits) for a state worker was $68,131 per year. In 2009, even after taking out $2,682 for the furlough days, the average compensation for a state worker increased to $69,028. So the average state worker is receiving an increase of $897 per year for the biennium, plus an additional ten days off. We have also received information that some employees have to work overtime, at time and a half, to make up for the work they missed while on furlough so the actual cost will increase.

Clearly the only reason to support the tax increases is to continue the already alarming rate of the growth of government. During recessions both Presidents Kennedy and Reagan cut taxes. We should learn from history. Please join me in voting NO on Measures 66 and 67 in January. I have had enough of the government being the top priority; it is time to once again put the people first.